Federal officials will be investigating California’s high-speed rail plans, with the goal of determining if a portion of the project merits $4 billion in taxpayer funds, the Department of Transportation announced on Thursday.
Secretary of Transportation Sean Duffy directed the Federal Railroad Administration to launch a formal review of the California High-Speed Rail Authority (CHSRA) — alerting the agency to this process in a letter from the federal department’s chief counsel.
The Transportation Department noted that the segment under scrutiny — a stretch between Merced and Bakersfield in the Central Valley — was slated to be completed by 2020, at a cost $33 billion.
But the price tag of that portion alone has already surpassed its original total, while the latest estimate for the full San Francisco to Los Angeles railway is $106 billion, or more than three times original projections, according to the federal department.
“For too long, taxpayers have subsidized the massively over-budget and delayed California High-Speed Rail project,” Duffy said in a statement. “President Trump is right that this project is in dire need of an investigation.”
The forthcoming compliance review, Duffy explained, will focus on “whether the CHSRA has followed through on the commitments it made to receive billions of dollars in federal funding.”
“If not, I will have to consider whether that money could be given to deserving infrastructure projects elsewhere in the United States,” the secretary added.
The investigation will follow up on a monitoring review that was completed in October 2024 and that identified specific “areas of interest,” Kyle Fields, chief counsel of the Transportation Department, noted in the letter to CHSRA CEO Ian Choudri.
The letter also cited a report issued by CHSRA’s own inspector-general earlier this month, which found that the agency’s schedule for the Merced-Bakersfield segment “may not account for current conditions and risks.”
“The compliance review and resulting findings may result in remedial action up to and including withholding of reimbursement and termination of cooperative agreements,” Fields warned in the letter. “Any work completed from the date of this notice forward is at the risk of CHSRA.”
In response to the notification, Choudri said in a statement that he and his colleagues “welcome this investigation and the opportunity to work with our federal partners.”
“With multiple independent federal and state audits completed, every dollar is accounted for, and we stand by the progress and impact of this project,” Choudri continued.
He noted that 171 miles of the rail are already under active construction, with more than 50 major structures completed, 14,700 jobs created and 880 small businesses involved in the building process.
“This investment has already generated $22 billion in economic impact, primarily benefiting the Central Valley,” Choudri added.
